Property interview: Gateley partner on housing targets and the joys of planning

WITH the Government challenging the industry to deliver 250,000 homes a year, the pressure on housebuilders to deliver has never been felt so strongly.

Planning minister Brandon Lewis last year suggested that 1m homes could be built over this Parliament, claims which were met with disbelief from the housebuilding sector.

Mr Parker-Fuller, who joined groundbreaking listed law firm Gateley plc from Watson Burton in November 2013 to launch its Leeds residential development division, said he understood the outcry.

The Gateley partner, who has grown his team to 16 people since then, said: “There’s a lot of appetite in the market. But the only time in our history where were were building that many houses was when local authorities were building council housing in massive estates.”

Each of the major housebuilders, Taylor Wimpey, Persimmon and Barratt Homes deliver around 13,000 homes a year, Mr Parker-Fuller said, with the next level of builders delivering around 7,000 homes each a year, and numbers declining steadily after that.

Overall, he said, the top 100 housebuilders deliver around 110,000 homes a year, far below the targets the government set.

“There’s only so much we as a sector can deliver, and there’s only so much we can get through planning. The figure at the minute for the top 100 housebuilders is around 110,000 homes a year.

“It was a bold statement from the Government that left people wondering where those numbers came from. No one sits on land or land banks, they build when they can. It’s a long process from buying land to selling it fully developed, and there is no clear profit until the later stages of the build.

“Unless major Housing Associations up their game, or the public sector gap is plugged, it is unrealistic.”

Mr Parker-Fuller did say that growth partnerships such as that between the Government and Lloyds Bank might be the way forward.

Construction group Kier, which employs 800 people in Yorkshire, announced a £1bn housing delivery fund by Kier Living, The Cheyne Social Property Impact Fund and The Housing Growth Partnership (a joint venture between the HCA and Lloyds Banking Group) as it aims to help the public sector build 10,000 homes across the UK.

“WIthout the public sector, it’s basically unachievable,” Mr Parker-Fuller said.

In terms of investor and housebuilder confidence, the increase in stamp duty hasn’t helped housebuilders, he said, though extending Help to Buy has injected further confidence in the housing market after lenders particularly got burned during the recession.

“Help to Buy is responsible for a greater degree of confidence. There is growing faith in the market, and developers are looking at larger schemes and urban extensions .”

Major housing developments going on in Yorkshire include City Fields, a 2,700-home development, which was approved in 2014 and 148 homes to be delivered by Taylor Wimpey in Sowerby Bridge, with detailed planning approval secured.

But planning continues to be a source of frustration for the development sector.

With planning, there is a political agenda usually, said Mr Parker-Fuller. “There are lots of problems with planning. Mainly that the decisionmakers involved are elected, and not much happens in that two-year window of local elections. Planning gets emotive then, when professional case officers should be making the decision.

“This contributes to the length of time planning takes, as well as the complexity of applications, with environmental impact reports on air quality and further archaeological surveys. This affects the viability of a development which would otherwise be a good and sound development.”

“Each new round of planning applications is more and more complex and it makes it difficult to get large scale developments through planning and it also doesn’t have sufficient bodies to deal with the volume of applications needed to enable the Government’s delivery targets.”

So unless the Government can sort a cumbersome and convoluted planning process, it is unlikely they will be meeting their targets any time soon.